Costco, right, they nailed it again in their fiscal third quarter of 2025. They just don’t seem to miss. Every time you think, "Is this the moment they slip up?" Nope. Solid earnings, like clockwork. Their game plan? It’s really something. So here’s the real question—should you throw your money into Costco’s stock pile? Let’s break it down a bit.
So, what’s Costco all about?
Alright, imagine walking into a massive warehouse where, surprise, the store itself is pretty much the warehouse. Oddly efficient, yeah? They call it a warehouse club setup. You feel like you’re part of some secret shopping society because you gotta pay an annual fee just to get in. Weirdly exclusive for a place selling bulk toilet paper, huh?
Saw this image of someone stuffing their full cart into their trunk, and I thought, "That’s the Costco life in a nutshell."
Membership fees? Gold mine. They’re like pocketing straight cash. Third quarter 2025, we’re talking $62 billion in product sales, with $1.2 billion just from memberships alone. Cost of goods was around $55 billion—doesn’t take a math genius to see what’s going on there. General costs hit about $5.6 billion. Running the numbers, it all rounds out to an operating income of $2.5 billion. Membership fees? They’re half of that. Pretty wild, right?
This setup lets Costco play with their prices a lot. They can keep things cheap, keep folks coming back for those renewals. It’s like a well-oiled, price-loving machine.
Thinking about snagging some Costco stock?
So, with all that going on, it’s kinda obvious why their same-store sales shot up 5.7%. Opened new spots, boosted overall sales by 8%. More folks popping in, like a 5.4% traffic rise, and a bit more cash spent per trip. Oh, online sales? Up 15% from last year. Who’s surprised?
All this sounds awesome, right? But hold up. As a business, Costco’s top-notch. But stocks? Maybe not so much. They’re already up 25% over the past year—double the S&P 500’s gain! People know Costco’s rocking it. That’s the catch.
Look at the usual valuation stuff, and it’s like, "Wait a sec." Those metrics are through the roof compared to their five-year norms. The P/E ratio? It’s sky-high.
Probably a good idea to sit this one out.
No doubt, Costco’s a powerhouse. Numbers don’t lie. But investors are onto it. Prices are up there, almost like they expect Costco to be perfect forever. Remember Ben Graham’s wisdom? Even if a company is fantastic, paying too much for its stock isn’t smart. Seems like Costco’s sitting in that pricey seat right now.
